Wiley Has Earnings Dip on Flat Sales

Sep 09, 2013

Sales were flat and operating income fell 9% in the first quarter ended July 31, 2013 at John Wiley. The flat sales were attributed in part to currency fluctuations and a drop in print sales that was not entirely offset by higher digital sales. Sales dropped in the professional development segment but rose in research (formerly STMS) and education. Total revenue held even at $411 million and operating profit was $35.6 million.

Earnings included more charges--$7.8 million—taken in the quarter association with Wiley’s restructuring program. Job cuts fell particularly hard in the professional development segment in the quarter as Wiley, after selling most of its consumer assets, continued to remake the division. “Our transformation from print publisher to provider of digital knowledge and knowledge-enabled services continues,” said Steve Smith, president and CEO of Wiley in a statement. “Today, 52% of our revenue comes from digital content and services, up from 45% a year ago, mainly reflecting gains achieved through the disposition of our consumer publishing business and our increased investment in digital research, online assessment, test preparation and educational services, including full-service online degree programs and advanced course management tools.”

Smith said results were “generally in line with our expectations.” Print sales were down in both the professional development and education segments partly the result of “university bookstores and other book retailers ordering less and later in response to limited visibility into demand, increased emphasis on inventory management, and a later start to the fall semester in the U.S.” In professional develpment, sales of print books fell 10% to $57 million, while digital book sales rose 21%, to $10.3 million. Business was the group's largest market in the quarter with sales of $37.7 million, down from $39.2 million in the first quarter of fiscal 2013. Sales of technology books fell 10%, to $147.2 million and sales of its remaining consumer books fell 10% to $9.9 million.

“Given the results this quarter and our expectations for the remainder of the year, we are reiterating our guidance for low-single-digit adjusted revenue growth and adjusted EPS of $2.85 to $2.95,” Smith said.

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